New limits to Colorado business tax credit approved

John Hickenlooper, left, greets Rollie Heath at the Boulder Chamber Building before signing a bill about enterprise zones on May 15, 2013. (Daily Camera | CLIFF GRASSMICK)

DENVER—Limits on a Colorado tax credit aimed at spurring economic growth in distressed areas have been put into place.

The credit has come under scrutiny because it has grown to cover most of the state. Gov. John Hickenlooper signed a bill Wednesday that modifies the decades-old Enterprise Zone Program. It did not have limits when it was created and businesses were eligible for $99.3 million in tax credits in 2010.

The new law puts an annual limit of $750,000, which can be carried over for 14 years. The bill doesn't change what areas are designated as enterprise zones for now. But lawmakers agreed to review the designations in 2014, instead of 2016.

Critics have questioned whether the credits actually promote growth in distressed areas. But supporters say the goal is to create a business-friendly environment.